On August 8, 2019 Kitov Pharma Ltd. ("Kitov") (NASDAQ/TASE: KTOV), a clinical-stage company advancing first-in-class therapies to overcome tumor immune evasion and drug resistance, reported financial results for the six-month period ended June 30, 2019 (Press release, Kitov Pharmaceuticals , AUG 8, 2019, View Source [SID1234538422]).
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Key Financial Highlights for the first half of 2019:
Revenues of $1 million as a result of the first milestone payment from Coeptis Pharmaceuticals.
Decrease in research and development expenses to $1.7 million compared to $2.8 million in 1H18.
SG&A expenses of $3.3 million, similar to 1H18.
Net cash used in operating activities decreased to $2.3 million compared to $3.5 million in 1H18.
Net cash balance and short-term deposits at the end of 1H19 of $7.8 million, not including $3.5 million investment in Kitov by Orbimed, Pontifax and Arkin expected following completion of the FameWave acquisition.
Isaac Israel, chief executive officer of Kitov Pharma, commented, "During the first half of 2019, we made a great progress in the acquisition of FameWave announced earlier this year, with fulfillment of the major closing conditions including the clinical collaboration agreement signed with BMS. This acquisition of a clinical stage oncology asset is a major step in our shift towards an oncology focused company. With the recent successful completion of the IND-enabling studies to advance NT-219 into the clinic and the almost completed acquisition of CM-24, we will soon initiate clinical trials with both candidates which we believe have a great potential to provide effective and long-lasting treatments for patients."
Mr. Israel added, "We have additionally achieved significant milestones with Consensi during this period. With our plans to launch in the U.S., through our partnership with Coeptis Pharmaceuticals, we are already bringing additional revenues to support our oncology programs. The success of this program is also a reflection of our team’s ability to successfully execute end-to-end development of pharma products."
Key Research and Development Highlights
NT-219
NT-219 is a first-in-class small molecule dual inhibitor of STAT3 and IRS1/2, with the potential to prevent and overcome drug resistance in various cancer types when used in combination with existing agents. Key achievements for the NT-219 program for the six-month period ended June 30, 2019 include:
Completed IND-enabling studies to advance NT-219 for the treatment of patients with recurrent or metastatic head and neck cancers.
Planned Phase 1/2 open label multi-center study which will include a dose escalation with fewer than 20 patients and an expansion cohort with 30 patients, to investigate NT-219 in combination with cetuximab in patients with recurrent and metastatic squamous cell carcinoma of head & neck cancer (SCCHN). The main goal of the study is to evaluate the safety, tolerability and maximum tolerated dose, with a secondary endpoint to obtain preliminary efficacy data.
Announced new findings related to NT-219 mechanism of action showing that even a short exposure of cancerous cells to NT219 was sufficient to trigger irreversible shutdown of cancer pathways, resulting in a long-term anti-cancer effect. These new findings suggested that IRS1/2 dissociates from the cell membrane, undergoes serine phosphorylation which prevents rebinding to the receptor, and is finally degraded by the proteasome. This sequence of events leads to the blockage of PI3K – AKT pathway – a major cancer cell survival pathway.
CM-24
CM-24 is a clinical-stage monoclonal antibody antagonist of CEACAM1, a novel immune checkpoint that supports tumor immune evasion and survival through multiple pathways. Kitov plans to develop CM-24 as a combination therapy with the PD-1 checkpoint inhibitor nivolumab (Opdivo) in clinical collaboration with Bristol-Myers-Squibb (BMS) to treat non-small cell lung cancer (NSCLC) patients. Key achievements for the CM-24 program for the six-month period ended June 30, 2019 include:
Announced signature of agreement to acquire FameWave Ltd., a privately held biopharmaceutical company developing CM-24.
Announced key milestone in the acquisition of FameWave, with the signature of a clinical collaboration agreement between FameWave and BMS for a Phase 1/2 clinical trials to evaluate the combination of CM-24 with nivolumab (Opdivo), BMS’s PD-1 inhibitor, in NSCLC.The safety profile of CM-24 was previously evaluated and found to be well tolerated in a Phase 1 study conducted by Merck at doses up to 10mg/kg.
Analysis of the Phase 1 data suggested that CEACAM-1 receptor saturation requires a higher dose of CM-24, which is expected be achieved with less than 20mg/kg if administrated every two weeks. Kitov believes that the combination of CM-24 with Opdivo is advantageous over Merck’s pembrolizumab (Keytruda) due to Opdivo’s Q2W administration protocol, compared to the Q3W administration protocol for Keytruda.
FameWave entered into a manufacturing agreement with its contract manufacturer for the production of CM-24 for the planned Phase 1/2 study.
Consensi
Consensi is a fixed-dose combination of celecoxib (Celebrex), a non-steroidal anti-inflammatory drug (NSAID) for the treatment of pain caused by osteoarthritis, and amlodipine besylate (Norvasc), a drug designed to treat hypertension. Consensi is under patent protection in the U.S. until 2030 and is the only NSAID whose labeling indicates a reduction of blood pressure and consequent risk reduction of heart attack, stroke, and death. Kitov plans to use revenue from milestone payments from multiple regional licensing deals for Consensi to advance its oncology pipeline. Key achievements for the Consensi program for the six-month period ended June 30, 2019 include:
Kitov signed an exclusive marketing and distribution agreement with Coeptis Pharmaceuticals for the U.S. market. The agreement provides for total milestone payments from Coeptis to Kitov of $3.5 million, of which Kitov has already received $1 million upon execution of the agreement. Additional milestone payments are due in the upcoming months upon completion of an agreed manufacturing plan and upon first commercial sales in the U.S. In addition, Kitov will be paid 40%-60% of Coeptis’ net profit on Consensi sales.
Expected Milestones for 2H19:
Submit IND for the initiation of Phase 1/2 study with NT-219 in combination with cetuximab in patients with recurrent and metastatic SCCHN.
Complete closing of transaction for the acquisition of FameWave and its CM-24 candidate
Complete preparation for launch of Consensi in the U.S. with commercial partner Coeptis Pharmaceuticals.
Submit marketing approval applications to the local regulatory authorities for potential registration of Consensi in China which will trigger an additional milestone payment to Kitov.
Financial Results for the Six-Month Period Ended June 30, 2019
Revenue for the six-month period ended June 30, 2019 was $1 million, resulting from a milestone payment from Coeptis related to Consensi in 2019, and same as in the first half of 2018 due to milestone payment from CSBio on Consensi in the first half of 2018.
Research and development expenses for the first half of the year ended June 30, 2019 were $1.7 million, a decrease of $1.1 million compared to the six-month period ended June 30, 2018. The decrease is mainly due to a reduction in clinical trials and regulatory expenses related to Consensi prior to its approval by the FDA in the first half of 2018, a decrease in bonuses accrued in the first half of 2018 in connection with FDA approval of Consensi as well as a decrease in ESOP costs in the first half of 2019 compared to the first half of 2018.
Selling, general and administrative expenses for the first half of the year ended June 30, 2019 were $3.3 million, compared to $3.4 million for the first half of year ended June 30, 2018.
Net cash used in operating activities was $2.3 million for the first half of the year ended June 30, 2019, compared to $3.5 million for the first half of year ended June 30, 2018. The decrease reflects a reduction of operating expenses of $1.2 million in the first half of 2019 compared to first half of 2018.
Kitov’s operating loss for the six-month period ended June 30, 2019 amounted to $3.6 million, compared with an operating loss of $4.4 million for the six-month period ended June 30, 2018. The decrease in operating loss reflects the decrease in operating expenses as mentioned above during 2019.
Kitov’s net loss for the six-month period ended June 30, 2019 amounted to $2.6 million, compared with a net loss of $5.2 million for the six-month period ended June 30, 2018. Basic and diluted loss per share in the first half of 2019 was 14 cents compared to 42 cents in the first half of 2018.
Cash, cash equivalents and short-term bank deposits totaled $7.8 million as of June 30, 2019. Upon closing of the FameWave acquisition, Kitov will receive an additional $3.5 million investment from Orbimed, Pontifax and Arkin.